In a recent survey conducted by Bloomberg, Nigeria has emerged as the leader in the upswing of oil production among OPEC (Organization of the Petroleum Exporting Countries) nations for the month of October 2023. This development is noteworthy in the context of Nigeria’s ongoing efforts to boost its oil production and secure a higher quota within OPEC.
The Surge in Oil Production
The Bloomberg survey, published on November 1, highlights Nigeria’s prominent role in the surge of oil production within OPEC during October 2023. Several other African OPEC members also showed minor increases in their crude oil production during the same period. Overall, OPEC collectively produced an average of 28.08 million barrels per day in October, marking a modest increase of about 50,000 barrels per day compared to September 2023.
Nigeria spearheaded this rise in production, with other African nations such as Congo, Gabon, Angola, and Equatorial Guinea following suit.
OPEC’s Evaluation and Potential Adjustments
The increased production by these countries has drawn the attention of OPEC, which is currently evaluating the production capabilities of its member nations. This evaluation could potentially lead to adjustments in their output quotas for the year 2024. Nigeria’s output, for example, increased by 60,000 barrels per day in October, reaching a level of 1.49 million barrels per day. While this is the highest production level in nearly two years, it still falls short of Nigeria’s targeted aspirations, leaving uncertainty about whether it will be sufficient to warrant a revision in the quota.
Mixed Views on the Decline in Production
The decline in Nigeria’s crude oil production over the past few years has raised questions and sparked debates within the industry. Some believe that crude oil theft has been a significant factor hampering production and that this issue has worsened over time. On the other hand, a few individuals accuse certain operators and the NNPCL (Nigerian National Petroleum Corporation Limited) of perpetuating a false narrative of crude oil theft to justify security contracts given to former militants in the Niger Delta region.
A Look at Nigeria’s Production History
To understand the significance of Nigeria’s recent oil production increase, it’s essential to consider the country’s production history. Statista’s analysis reveals substantial shifts in Nigeria’s crude oil production over the past 23 years. The country reached its peak production of 2.5 million barrels per day in the year 2000 but experienced a decline to 1.1 million barrels per day as of August 2023.
This journey involved fluctuations, from 2.15 million barrels per day in 2000 to a high of 2.52 million barrels per day in 2005, followed by a gradual decline to 1.89 million barrels per day in 2016. Although there were minor recoveries in 2017 and 2018, production dropped to 1.45 million barrels per day by 2022 and further decreased to 972,000 barrels per day in August 2022 due to increased theft.
In 2023, production fluctuated between 1 million barrels per day in April and a peak of 1.26 million barrels per day in March, excluding condensates. In September 2023, the country pumped 1.3 million barrels per day (excluding condensates), according to the Nigerian Upstream Petroleum Regulatory Commission.
Looking Ahead
Starting from 2024, Nigeria is set to adopt OPEC’s revised oil production quota of 1.38 million barrels per day. However, stakeholders remain optimistic that the country can catch up to its production quota before this deadline, which could prompt OPEC to reconsider and potentially increase the quota. Nigeria’s efforts to boost oil production are not only crucial for its economic stability but also have broader implications within the OPEC alliance.
